UK business activity slows to weakest since May as firms cut more jobs

Growth in the UK’s private sector has slowed to its weakest level since May as higher business costs led to “subdued” demand and further job cuts, according to new figures.

Economists warned that influential survey data means “alarm bells should be ringing that the economy is faltering”.

The S&P Global flash UK composite purchasing managers’ index (PMI) reported a reading of 51.0 for September, representing the weakest score for four months.

It dropped from a reading of 53.5 in August, which had been the strongest score for 12 months.

The flash figures are based on preliminary data.

Any score above 50.0 indicates that activity is growing while any score below means it is contracting.

Surveyed businesses reported subdued demand and pressure on margins as they faced increases in business costs.

Firms highlighted that there was “weak” client confidence amid a backdrop of economic and geopolitical uncertainty.

The manufacturing sector witnessed its sharpest contraction since March, as companies highlighted weaker order books both domestically and for export.

Some firms also highlighted that the production pause at Jaguar Land Rover, due to a cyber attack, had also impacted their levels of work.

The new figures also highlighted another decrease in private sector employment, with firms reporting hiring freezes and decisions to not replace departing workers due to cost pressures.

Chris Williamson, chief business economist at S&P Global Market Intelligence, said: “September’s flash UK PMI survey brought a litany of worrying news including weakening growth, slumping overseas trade, worsening business confidence and further steep job losses.

“The only good news is perhaps that, just as the Bank of England grows increasingly worried about persistently elevated inflation, the PMI indicated that price pressures have moderated in September.

“With the weakening of business activity growth to a rate consistent with the economy almost stalling, and around 50,000 job losses being signalled by the PMI again in the three months to September, alarm bells should be ringing that the economy is faltering, which could help shift the policy debate at the Bank of England back towards a more dovish stance.”